Accounting question

[mattison]

I was curious what everyone is doing for their accounting. I've been getting a little bit confused with things. I have a retail/service business in arizona. I have to do my taxes and sales tax here. How does that work out with online/dropship stuff and within different states i ship. My LLC is set up for arizona as well for my online business.

I'm sure i could ask my accountant but i'm looking for a new one. He is my accountant and I had to show him proof i paid him my monthly bill for his services. Now that's bad.

Anyways, I'm sure it's a pretty basic question but if you look at all these online books and stuff they never have anything like that in them.

Also would people recommend an accountant or should i be using something like quickbooks. I usually prefer just letting other people deal with it. Thanks a bunch guys. I just want to do this right.

[mattison]

Sorry i also forgot. But my regular business i use a payroll company to pay myself. Do alot of you do the same for your online stuff or would recommend that. Got to keep up on payroll taxes as well. Thank again

[David_D]

Yup thats what i do to... It all gets mixed together in a pot, i draw a min wage and get paid the rest in dividends....

i hope that helps

[Elan]

I'm looking into the same dropship / sales tax question asked by mattison.

Was there even an answer to the question of how working with a dropshipper with the following two scenarios works:

1) Consumer lives in same state as dropshipper
2) Consumer lives in different state from dropshipper

And, yes, how do Amazon, eBay, and the rest deal with this?

Thanks a lot!!! Gotta get this muse off the ground!

[phil]

1) Seller ships goods within their state

Seller is responsible for paying sales tax to Seller's state for these sales.

(if Buyer's billing address is in Sellers state, but they are shipping to another random state, then there's no sales tax)


2) Seller ships goods outside of their state

Seller doesn't do anything. Technically, Buyer is supposed to report and pay sales tax to their state, but in practice, this never really happens, unless for really large purchases (like Buyer imports a $100,000 piece of artwork).


And, yes, how do Amazon, eBay, and the rest deal with this?

eBay doesn't sell anything, so they don't pay sales tax, but they certainly have the systems in place to help their sellers calculate sales tax.

Amazon has nexus in a bunch of states, so they have to pay sales tax for orders shipped to states that they have nexus in.

If you're a simple dropshipper, you probably don't have to worry about nexus in multiple states, but when you start having multi-state offices, or multi-state employees, you would have it.

Also, the state that the actual dropshipping warehouse is in doesn't matter. Lets say for example Seller is in Arizona, and Buyer is in California, and dropshipping warehouse is also in California. No sales tax would be collected.

[BlindSquirrel]

Get a good accountant, but the post by Phil sounds in line what my accountant told me. I just took the rules about sales tax from our accountant and had our web developer ensure that we gathered the right information from our customers so we can do accurate sales tax reporting at the end of the month. If your website gives you the right information, then taking care of sales tax each month isn't a big deal.